Many students do not like to read aloud in class and their motivation to do so declines quickly. In an ESL class students may also be apprehensive to read aloud because they are not confident in their ability to speak the language. An activity that can work with different levels and keep students engaged is called Reader's Theatre. In stories that have a lot of dialogue students can choose parts to read. Those that may be more advanced readers or more confident using English can take the parts as narrators. It can be as interactive as you like. Students can read the parts from their seats, stand up and act a bit or the room can be rearranged to coincide with the story. While it takes more teacher prep time with having to scan pages and highlight parts, all readers become actively engaged and the more the activity is done, the more comfortable they become with it.

I like those ideas a lot. I think something else that my help lower the affective filter that ELL's may feel is familiarization with a text before reading aloud. I often use this with my students at the beginning of the year when they are feeling most shy. We do a choral reading of the text before students read aloud individually, or preview a text before we read it.
At first, I suggested choral reading in order to help students with pronunciation and the cadence of the language. It is a pretty controlled activity, and I was surprised at the participation at that time, and even more surprised when students' asked to do it more often. I think students who are nervous are often more comfortable with the structure of a teacher-controlled activity until they're are more comfortable with a language and a new classroom environment.